The International Economy
- Created by: ekenny5
- Created on: 16-04-22 09:33
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- The International Economy
- Globalisation
- causes
- improved transport
- technology
- growth of MNCs
- global trading blocs (EU, NAFTA)
- reduced protectionism
- EoS
- global media growth
- containerisation
- mobility of capital and labour
- financial systems
- characteristics
- increasing trade to GDP ratios
- deeper specialisation of labour
- expansion of financial capital flows
- global supply chains
- FDI
- labour migration
- global brands
- gains
- division of labour and EoS
- competitive markets
- innovation
- lower prices
- more choice
- increased per capita income
- increased labour force
- developing countries can borrow easier
- costs
- inequality
- environmental damage
- external shocks
- structural unemployment
- loss of local, independent brands
- protectionist tensions
- MNCs
- operates in >1 country
- access EoS
- avoid protectionism
- provide jobs and training
- investment multiplier in developing countries
- causes
- Trade
- comparative advantage
- a country has lower costs relative to opportunity costs when specialising
- absolute advantage
- a country can produce more using fewer resources
- specialising in products and then trading with countries who also specialise can increase total output
- gains
- export revenues and jobs
- increased contestability
- better access to new technology
- inflows of knowledge
- EoS
- more allocative
- costs
- transport costs
- -ve externalities
- risk of structural unemployment
- rising inequality
- risks of external shocks
- pattern of trade
- rise of global trading blocs
- de-industrialisation of advanced economies
- increased participation in former communist countries
- emergence of China and India
- the composition of M and X in an economy
- protectionsim
- tariffs - tax on M
- need graph
- quotas - physical limit on quantity of imports
- subsidies - giving domestic goods advantage over M
- Import dumping - selling products at prices lower than the domestic price
- lead to anti-dumping tariffs
- -risk of retaliation - distorts free market -higher prices - recessive - higher X costs
- reduced consumer surplus
- lower efficiency
- the WTO encourages free trade by reducing barriers
- tariffs - tax on M
- economic integration
- Customs union: -no tariffs - no boarder checks - common external checks - common trade deals
- Single European Market (SEM) - no tariffs - common external tariffs - free movement of goods & people - common currency
- +ves - trade creation - reduced costs - EoS - competition - free movement
- -ves - structural change required - regional effects - monopoly - trade diversion
- comparative advantage
- Globalisation
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